NACFAM Annual Policy Conference and AMLF Meeting “ Incentives to Strengthen Advanced Manufacturing “

1. NACFAM Annual Policy Conference and AMLF Meeting“Incentives to Strengthen Advanced Manufacturing “ Dennis Thompson Sr. VP SCRA

2. Incentives Wikipedia Definition of Incentives:

3. Incentives • There are multiple incentives that may be used to help advanced manufacturers succeed in the global marketplace. • Today I am going to focus on: • Comprehensive tax reform • Investments in R&D • Policies to increase innovation • Fiscal rebalancing

4. Comprehensive Tax Reform • The American corporate tax system is a paradox. • This disconnect has attracted a lot of attention. • Comprehensive corporate tax reform sounds good politically, but is difficult to do in practice.

5. Comprehensive Tax Reform • The nonpartisan Congressional Research Service said corporate tax breaks cost the Treasury $158 billion dollars in 2011. • In a clear sign of just how hard it is to take away corporate tax breaks. • Everyone wants “Comprehensive Tax Reform” as long as you “don’t gore their ox.”

6. Investing in the Future • “Investing in the Future” is the key marker of whether the United States is prepared to make farsighted decisions to improve education, build new infrastructure and increase innovation.

7. Investing in the Future • Because many of the world’s economies have already adopted new technology growth models and are making substantial investments to implement them, the U.S. response can be neither small nor inefficient.

8. Policies to Increase Innovation • Policies to Increase Innovation should be made in areas that will equip the United States to com­pete in industries with high growth potential • Priorities need to include: • Enhancing the United States’ attractiveness as a place for investment • Supporting entrepreneurship through effective im­migration policies that attract a highly skilled labor force • Supporting innovation in clean energy and low car­bon technologies through a cohesive set of federal, state and local low-carbon economic growth strate­gies that will help increase the United States’ leader­ship in these sectors.

9. Fiscal Rebalancing • Fiscal rebalancing will require the United States to insulate economic recovery from the process of fiscal reform while reducing and stabilizing debt over the long term.

10. Fiscal Rebalancing • The short-term nature of the deal on the debt ceil­ing, the need to set a new budget and the need to deal with the spending cuts under the sequester all ensure that fiscal issues will continue to dominate 

11. Call to Action • In his 2011 State-of-the-Union address, President Obama repeatedly called for a return to innovation as the engine of U.S. competitiveness . • Since that speech, government policies aimed at reviving and expanding the technology-based sector of the U.S. economy, especially manufacturing, have begun to form.

12. Other Issues • Unfortunately, budget deficits and the consequent ratio of U.S. debt to GDP are much higher today than in the 1960s, providing substantial barriers to needed adaptive efficiency. • The other major barrier to the needed policy response is the almost total focus on ‘macro-stabilization’ (monetary and fiscal) policies.

13. The Elephant in the Room • Self-sustaining growth can only result from investment in productivity-enhancing assets based on regular advances in technology.

14. Wrap up • What incentives are needed if American industry is to do the right thing??? • Comprehensive tax reform • Investment in R&D • Policies to increase innovation • Fiscal rebalancing • Public/private Partnerships